Plug pulled on power plant
- Published: December 3, 2009
The Village made what some would call a wise and prescient decision last year when it declined to sign on to the coal-fired power plant American Municipal Power, Inc. planned to build along the Ohio River. AMP announced last week on Nov. 25 that it was terminating the AMPGS project due to a spike in construction cost estimates that rendered the project unaffordable for its customers. Though an AMP spokesperson declined to provide details, several sources indicate that municipalities that did commit to the project are now left with their share of the development costs, which range from thousands to millions of dollars.
Yellow Springs was one of the first communities to question the viability of a 1,000-megawatt coal plant in Meigs County when AMP, the Village’s nonprofit wholesale power supplier, began conducting project feasibility studies in 2006, according to Sandy Buchanan, executive director of Ohio Citizen Action. Villagers and Village leaders questioned the construction and operational risks the borrowers were asked to bear and the 50-year lock on power rates, as well as the unknown future cost of carbon emissions, which for a plant the size of AMPGS was expected to produce 7 million tons of CO2 per year. Village Council members also cited the ethical problem with supporting an environmental polluter such as coal when they finally voted 3–2 not to participate in the project in January 2008. Local resident Ellis Jacobs, who works as a public interest attorney in Dayton and opposed local participation in the project, believes Council’s decision was sound.
“The facts that were used to oppose the plant were first developed in Yellow Springs, which says that folks here had a major role in killing this plant,” he said Monday. “We also saved a ton of money by not signing on — it’s fair to say that we would have been stuck with some portion of the development costs.”
According to AMP spokesperson Kent Carson this week, AMP’s board of trustees voted to terminate the coal plant when construction estimates jumped 37 percent above the $3.25 billion quoted in May. The new building estimate tipped the projected cost of power up to a level commensurate with market rates, which rendered the project “no longer the best option for our members,” he said. Prior to the cost increase, the expected rates would be competitive with the market, he said.
According to Carson, AMP did not have the numbers to show how much participants had invested so far in development costs. Ohio Citizen Action tried in October to get the same information from AMP. In response to a public records request OCA made, AMP’s attorneys stated in a letter that AMP was “not subject to the Public Records Act and is not obligated to produce the requested information”— though AMP is governed by its member municipalities and was slated to received $30 million in federal stimulus funds for the project.
In a financial report Jacobs saw in March 2009, AMP estimated it had spent $19 million so far in development costs. But in a more recent press release on Nov. 25, the city of Martinsville, Va., a participant in the AMPGS project, stated that AMP had so far spent an estimated $200 million to develop the facility. And having committed to a power level of eight megawatts from AMPGS, Martinsville currently owes AMP an estimated $2.08 million for its share of prorated development costs. The city’s leaders are considering either paying back the money over 10–15 years through a monthly billing increase for residents or rolling that investment into an alternative AMP project, such as natural gas power generation or additional hydroelectric projects. The city is also considering taking legal action against the plant contractors, the press release stated.
Accordingly, had Yellow Springs signed onto the coal plant at the slated 1 megawatt rate in 2008, the Village would currently owe AMP its share of prorated development costs, equal to somewhere between $20,000 and $200,000.
According to Buchanan from OCA, while AMP was urging communities to rush to sign on to the plant, Yellow Springs approached the proposal thoughtfully and took its time to hold public forums and gather information on the issue.
“Yellow Springs was one of the first places to question whether it was a good idea,” she said, adding that in that way, the town “provided a lot of leadership” for other communities, such as Oberlin, who also declined, and Cleveland, who signed up at a lower rate than originally proposed. The other 80 communities that opted to participate were stuck with a bill for the take or pay contract on a project that “never lived up to its promises,” Buchanan said.
Turning away the new coal plant was fiscally safe as well as faithful to one of Village Council’s stated goals to reduce its carbon footprint, Village Manager Mark Cundiff said this week. The Village still gets its power through AMP, some from renewable hydro and landfill gas projects, some from the open market and some from AMP’s aging Gorsuch coal plant, whose scheduled shutdown and replacement with AMPGS, AMP is currently reevaluating, Marietta’s press release stated. Though the Village currently has a stable power portfolio, 70–80 percent of its power contracts are set to expire by 2015, when the Village could be buying a lot more on the market if new contracts aren’t found, Cundiff said. The Village is working toward conservation of power usage as well as additional renewable power sources to achieve the ultimate goal of using no coal-fire power for the village, he said.
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